Announcing this here today, Virgin President Richard Branson said the partnership with

LanzaTech "represents a breakthrough in aviation fuel technology that will see waste gases from industrial steel production being captured, fermented and chemically converted using Swedish Biofuels technology for use as a jet fuel."

The low-carbon aviation fuel, which will be produced in India, is claimed to have half the carbon footprint of standard fossil fuel. "India, which is amongst the world`s largest steel producers, will be one of the first countries where the fuel will be produced as LanzaTech and partners develop facilities there," Branson said.

Within three years, Virgin routes from Delhi to London Heathrow could see flights run on the new fuel, a Virgin spokesperson said, adding that a `demo` flight with the new fuel was planned in 12-18 months. "A demonstration plant will be commissioned in China this year and the first commercial operation will be in place there by 2014. A facility in India should follow around six months later," she said.

Virgin, which would be the first airline to use this fuel, would work with LanzaTech, Boeing and Swedish Biofuels towards achieving the technical approval required for using new fuel types in commercial aircraft, the spokesperson said.

The premier British carrier was the first airline to fly a plane on bio-fuel in February 2008, when one of its Boeing 747 flew from London Heathrow to Amsterdam. The bio-fuel contained mix of coconut and babassi oil.

Maintaining that this low-carbon aviation fuel had "just half the carbon footprint of the standard fossil fuel alternative", the Virgin spokesperson said the revolutionary fuel production process recycled waste gases that would otherwise be burnt into the atmosphere as carbon dioxide. The technology is currently being piloted in New Zealand. Following successful implementation, a wider roll-out could include operations in the UK and the rest of the world, she said.

LanzaTech estimates that its process can apply to 65 per cent of the world`s steel mills, allowing the fuel to be rolled out for worldwide commercial use, the spokesperson said. "This (Virgin-LanzaTech) partnership to produce a next generation, low-carbon aviation fuel is a major step towards radically reducing our carbon footprint, and we are excited about the savings that this technology could help us achieve," Branson said.

"With oil running out, it is important that new fuel solutions are sustainable, and with the steel industry alone able to deliver over 15 billion gallons of jet fuel annually, the potential is very exciting," he said, adding that the "new technology is scalable, sustainable and can be commercially produced at a cost comparable to conventional jet fuel."

LanzaTech Chief Executive Jennifer Holmgren said the technology "will enable airlines to dramatically reduce their carbon footprint by reusing gases that would otherwise have been emitted directly into the atmosphere."

"We are confident that we will have a facility with the capacity to produce fuel for commercial use by 2014," he said.